New York Slips in a Rich Area: Billionaires

New York City has been eclipsed as the billionaire capital of the world, according to Forbes magazine, which yesterday released its annual ranking of the richest people on earth.

Seventy-four billionaires, with an average net worth of $5.9 billion, now call Moscow home, compared with 71, at an average of $3.3 billion, in New York City, the Forbes list shows.

The richest man in New York City is the industrialist David Koch, worth some $17 billion, according to the new Forbes ranking. He's followed by the leveraged buyout entrepreneur Carl Icahn with $14 billion and Chanel's Gerard Wertheimer with $12.9 billion.

Next on the list of richest New Yorkers is the city's two-term mayor, Michael Bloomberg, who retains a sizable stake in the eponymous financial news firm he founded more than two decades ago. He is worth $11.5 billion, according to the list.

The financier Ronald Perelman is worth $9.5 billion, and the publishing tycoons Samuel Newhouse Jr. and Rupert Murdoch are worth $8.5 billion and $8.3 billion, respectively.

The Blackstone Group's Stephen Schwarzman, worth $6.5 billion, edges out his private equity rival Henry Kravis of KKR, next on the list with $5.5 billion. The real estate entrepreneur Paul Milstein and his family, to which the magazine assigns a $4.5 billion net worth, rounds out the list of the 10 richest New Yorkers.

"Donald Trump, who doesn't need more publicity, is worth $3 billion," an associate editor at Forbes who worked on the list, Matthew Miller, said.

Two of Wall Street's most prominent fixtures, Bear Stearns's Jimmy Cayne and Lehman Brothers's Richard Fuld, have seen the value of shares in their respective investment banks shrink during the past year in the midst of the nation's credit crisis. Both are no longer billionaires and have dropped off this year's Forbes list. Sanford "Sandy" Weill's fortune, primarily composed of sagging shares in Citigroup, has dwindled to $1.4 billion, about half of what it was one year ago. The net worth of a former AIG chairman, Maurice "Hank" Greenberg's, at $1.9 billion, is also about half of what it was last year, as the insurance giant's stock price continues to plummet.

Moscow, meanwhile, is experiencing unprecedented wealth creation. While New York City's fortunes depend overwhelmingly on Wall Street, wealth in Moscow is derived from vastly different sources. Oil and gas, manufacturing, construction, and "diversified" are among the top industries in which Moscow's billionaires are active, according to Forbes.

"We won't get into how some of them made their money," a senior editor at Forbes who oversaw this year's rankings, Luisa Kroll, said. "Still, Russia is the dominant story in Europe this year, maybe the world. Where we see emerging economies, we see a remarkable emergence of billionaires."

Just 16 years after the collapse of the Soviet Union, Russia overtakes Germany as the home to the most European billionaires. "Never before in world history, not even during the industrial boom before World War I, have we seen such phenomenal global economic growth," the editor of Forbes magazine, Steve Forbes, said.

Every billionaire in Moscow — and, indeed, in Russia — is self-made. The average age of the billionaires there is just 46.

One reason for the rapid ascendancy of Moscow's elite is that the city's residents enjoy a 13% long-term capital gains tax, according to Forbes. New Yorkers, by comparison, have to fork over 15% of their long-term capital gains to Uncle Sam.

Moscow's replacement of New York City as home to the most billionaires has far-reaching economic distinctions. An example: The price of two nights in the Carlton Suite of Moscow's Ritz Carlton hotel now costs $10,000. Two nights in the Executive Suite at the Four Seasons in New York is a mere $4,300.